Ancillary Restraints in Turkish Competition Law

Under Turkish merger control regime, ancillary restraints could be non-compete, non-solicit clauses imposed on the seller, and rarely on both parties. These are directly related to the concentration, necessary for the transaction’s implementation, and to fully achieve the efficiencies expected from the concentration. Pursuant to Article 13(5) of Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board, the Turkish Competition Board’s (Board) approval of the transaction will also cover the ancillary restraints. Therefore, ancillary restraints will be covered to the extent that its nature, subject matter, geographic scope and duration are limited to what is necessary to fully achieve the efficiencies expected from the concentration.

General rules on ancillary restraints are defined in the Guidelines on Undertakings Concerned, Turnover and Ancillary Restraints in Mergers and Acquisitions (Guidelines). The parties make a self-assessment as to whether a certain restriction could be deemed as ancillary. Accordingly, a restriction such as a non-compete obligation should be (i) directly related and necessary to the concentration, (ii) restrictive only for the parties, and (iii) proportionate. Furthermore, as a rule, non-compete obligations must be limited to (i) those goods and services comprising the area of operations of the economic unit to be acquired before the transaction and (ii) the area of operations of the seller before the transaction.

The decisional practice of the Board and the Guidelines recognise that non-compete obligations that do not exceed three years in terms of their duration are generally accepted as reasonable, and a non-compete provision that is binding on the joint venture parents during the life of the joint venture is deemed proportionate in terms of scope. That being said, under the framework of ancillary restraints, it may be possible to accept non-compete obligations longer than three years, in case the customer tie-in lasts longer, or it is required by the nature of the know-how transferred, provided that the scale required by the concrete case is not exceeded. In its general decisional practice, the Board has deemed that post-term non-compete obligations of two years were proportionate; therefore, they constituted ancillary restraints (e.g., BBVA/Garanti Bankası (19.02.2015; 15-08/106-43), Maspex-Tat (26.12.2013; 13-72/1013-431), Ajinomoto (05.12.2013; 13-69/932-393), LF Invest (27.10.2010; 10-67/1423-539)).

For more information on ancillary restraints under Turkish merger control regime, please feel free to reach out to ELIG Gurkaynak at +90 212 327 1724 or through gonenc.gurkaynak@elig.com.